MENLO PARK, Calif.--(BUSINESS WIRE)--Jul 10, 2007 - Depomed, Inc.
(NASDAQ:DEPO) today announced results from its Phase 3 clinical
trial of Gabapentin GR, an investigational extended release tablet
for the treatment of patients with postherpetic neuralgia (PHN).
PHN is a persistent neuropathic pain condition caused by nerve
damage after a shingles, or herpes zoster, viral infection. Results
from the trial did not demonstrate statistically significant
efficacy relative to placebo in patients receiving an 1800mg total
daily dose of Gabapentin GR given once- or twice-daily.

The randomized, double-blind, placebo-controlled, multi-center
trial involved 407 PHN patients. Patients were randomized into one
of three treatment groups for ten weeks of treatment: Gabapentin GR
once-daily, Gabapentin GR twice-daily (each with 1800 mg total
daily-dose) and placebo. The primary endpoint of the study was to
assess the efficacy of Gabapentin GR compared to placebo in
reducing average daily pain scores from baseline to endpoint.
Secondary objectives included generating data on safety, sleep
interference and global impressions of changes in pain by
investigators and patients.

Results

The primary endpoint was not achieved with statistical
significance for either active treatment regimen, as compared to
placebo, over the ten-week treatment period. The mean reductions in
average daily pain scores from baseline to end of study were 1.83
(once-daily), 1.72 (twice-daily) and 1.43 (placebo). However,
statistical significance relative to placebo was achieved in each
of the first six weeks for the once-daily treatment arm and in each
of the first five weeks for the twice-daily treatment arm. Pain
scores in the placebo group continued to improve in the last four
weeks of the study.

The secondary endpoints of sleep interference, Clinical Global
Impression of Change or CGIC (a scale used by physicians for
overall assessment of patient improvement) and Patient Global
Impression of Change or PGIC (a scale used by patients to report
their overall assessment of change) were all statistically
significant for the once-daily treatment compared to placebo over
the ten week study period. Sleep interference scores were reduced
by 2.01 points with Gabapentin GR compared to -1.39 with placebo
(p=0.014). Physicians reported that 48.0% of patients taking
Gabapentin once-daily were "very much improved" or "much improved"
compared to 27.1% of the patients who received placebo (p is less
than0.001), as measured by the CGIC. Similar results were observed
for the PGIC in the once-daily and placebo arms (p=0.009).

The most common side effect observed was dizziness, which is
commonly associated with gabapentin. In the trial, the incidence of
dizziness for Gabapentin GR was 10.1% (once-daily) and 14.9%
(twice-daily) as compared to 3.0% for placebo. Somnolence was
observed in 2.9% of once-daily treated patients and 6.7% of
twice-daily treated patients, compared to 2.3% of patients on
placebo. Peripheral edema occurred in 5.1% of the once-daily
treated population and 4.5% in the twice-daily population compared
to no incidents of peripheral edema in the placebo group.

"The Phase 3 results we received today were very surprising and
disappointing to us in light of the encouraging safety and efficacy
data that we observed in our phase 2 clinical trial, in which we
achieved statistically significant results in a four-week period as
compared to placebo." said John W. Fara, Ph.D., chairman, president
and chief executive officer of Depomed. "We are particularly
surprised to see a high placebo effect that persisted throughout
the trial as compared to other large published PHN trials. We saw
clinically meaningful and statistically significant reductions in
pain scores from baseline to the ten-week endpoint in both active
treatment arms. However, the unexpected improvements in the pain
scores of the placebo group during the last four weeks of the study
prevented the achievement of statistical significance in the
primary endpoint that is required by the FDA."

"We will be evaluating these results internally and with
potential partners to determine how best to proceed with Gabapentin
GR in pain indications," said Carl Pelzel, Depomed's executive vice
president and chief operating officer. "We do not expect these
results to have an impact on our ongoing clinical development
program in menopausal hot flashes."

About Gabapentin GR

Gabapentin GR is an investigational extended release and gastric
retained formulation of gabapentin, an FDA-approved product for the
treatment of PHN. Formulated with Depomed's proprietary AcuForm(TM)
drug delivery technology, Gabapentin GR holds the potential to
offer patients the pain-relief benefits provided by immediate
release formulations of gabapentin, with fewer side effects and a
more convenient once- or twice-daily dosing regimen. The
formulation of once- or twice-daily Gabapentin is particularly
challenging since Gabapentin is absorbed through an active
transport mechanism which is concentrated in the upper
gastrointestinal tract. Therefore a gastric retained formulation of
Gabapentin, such as Gabapentin GR, may demonstrate an improvement
in delivering drug to these active transport sites compared to a
more traditional extended release technology. In 2006, 16.3 million
prescriptions for gabapentin were dispensed.

About Postherpetic Neuralgia

Neuropathic pain affects approximately 2.6 million individuals
in the United States. Postherpetic neuralgia (PHN) is a persistent
neuropathic pain condition caused by nerve damage after a shingles,
or herpes zoster, viral infection. It afflicts approximately one in
five patients diagnosed with shingles, or approximately 150,000
individuals in the United States. The incidence of PHN increases in
elderly patients, with 75 percent of those over 70 years old who
have shingles, developing PHN. The pain associated with PHN
reportedly can be so severe that patients are unable to resume
normal activities for months. Since there is currently no cure for
PHN, treatments are focused on relieving pain.

About Depomed

Depomed, Inc., is a specialty pharmaceutical company with two
approved products on the market and multiple product candidates in
its pipeline. The company utilizes its proven, proprietary
AcuForm(TM) drug delivery technology to improve existing oral
medications, allowing for extended, controlled release of
medications to the upper gastrointestinal tract. Benefits of
AcuForm-enhanced pharmaceuticals include the convenience of
once-daily administration, improved treatment tolerability and
enhanced compliance and efficacy. Glumetza(TM) (metformin
hydrochloride extended release tablets) is approved for use in
adults with type 2 diabetes and is being marketed in the United
States by King Pharmaceuticals and in Canada by Biovail
Corporation. ProQuin(R) XR (ciprofloxacin hydrochloride) extended
release tablets are approved in the United States for the
once-daily treatment of uncomplicated urinary tract infections.
Depomed's product candidate Gabapentin GR(TM) is currently in Phase
3 and Phase 2 clinical development for the treatment of two pain
indications, postherpetic neuralgia and diabetic peripheral
neuropathy, respectively. A Phase 2 clinical trial of Gabapentin GR
in menopausal hot flashes is also under way. Additional information
about Depomed may be found on its web site, www.depomedinc.com.

"Forward-looking Statement" Statements in this press release
that are not historical facts are forward-looking statements that
involve risks and uncertainties including, but not limited to,
those related to our results and timing of our Gabapentin GR
clinical studies; potential benefits of Gabapentin GR; our research
and development efforts, including pre-clinical and clinical
testing; regulation by the FDA and other government agencies.
Actual results may differ materially from those set forth in this
release due to the risks and uncertainties inherent in our
business, including, without limitation, risks and uncertainties
related to: our research and development efforts, including
pre-clinical and clinical testing; regulation by the FDA and other
government agencies; the timing of regulatory applications and
product launches; our ability to successfully commercialize our
products; the success of our collaborative arrangements with
development and commercialization partners; and other risks
detailed in our filings with the Securities and Exchange Commission
filings, including our most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q. You are cautioned not to place undue
reliance on these forward-looking statements which speak only as of
the date hereof. We undertake no obligation to revise or update
this release to reflect events or circumstances that occur after
the date of this release.